Stevens' company is in the midst of several auctions in other urban markets, but he said what is happening in San Diego is taking place for the first time in the downtown market. The auction, scheduled for Oct. 11, will put 49 units on the block with minimum bids 50 to 60 percent below their previous asking prices. The lowest-priced minimum bid is $129,000 (for a studio).

Stevens anticipates that all 49 units will be sold. Sellers can't determine pricing -- they have to let the market decide, according to Stevens, who said that Smart Corner has done a smart thing by "trusting the market."

Smart Corner started selling units in 2007 but 80 percent of its inventory remains unsold.

"We're starting to see large buildings like this with hundreds of hundreds of units available, and you can't just sell conventionally with any traction, without any momentum, without doing an event," Stevens said.